U.S. authorities are probing the immigration practices of Infosys after a whistleblower filed a civil lawsuit.

In the complaint filed in Circuit Court in Alabama, Jack “Jay” Palmer Jr., who was hired in the U.S. by Infosys in 2008 with the title of “Principal Consultant,” alleged that his managers sought his help to circumvent U.S. visa regulations and that company executives failed to act when he reported the illegal conduct.

In March of 2010, Mr. Palmer alleges, he participated in a meeting in Bangalore in which Infosys management was discussing ways to “creatively” get around restrictions in the U.S. that were making it tougher to obtain H-1B visas, which are intended for highly skilled workers who hold full-time jobs in the U.S. Management decided to start using–or rather abusing–easy-to-obtain B-1 visas, which normally are for short-term visits such as when employees need to attend business conventions, according to the complaint.

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Mr. Palmer alleged that Infosys managers asked him to write welcome letters for employees coming on B-1 visas to back up the case that they were on short-term visits for legal purposes, rather than stating the reality–that they had full-time jobs lined up in the U.S. The complaint says Mr. Palmer “was concerned about the accuracy of the letters and the legality of these employees working in the United States.”

He blew the whistle with the human resources department and refused the write the letters, the complaint says, after which company managers chastised him on a conference call for “not being ‘a team player.’”

These are damning allegations. It’s not yet clear what case federal prosecutors are building in Texas, where a grand jury investigation is underway. But if a jury winds up hearing and buying the argument that Infosys flouted immigration laws and then shut up a whistle-blower, it would be a huge embarrassment not just to the company, but the image of the entire Indian technology sector.

To be fair, we haven’t really heard Infosys’ side of the story yet. The company has acknowledged receiving a subpoena in the federal investigation and has said it is cooperating with the probe.It also has acknowledged using B-1 visas but denied abusing them. In a statement Thursday, Infosys declined to comment on Mr. Palmer’s civil suit and said it is concentrating its efforts on conducting an internal review “to understand whether inappropriate actions were taken in the visa application process.” The company said it has taken steps “to ensure that all Infosys employees involved with the visa application process and those Infosys employees traveling to the United States are acting consistent with the law and with Company policy.”

It’s important to note the growing frustration among Indian I.T. workers about the U.S. visa application process. Many are complaining that long delays and unfair rejections are becoming common, regardless of how scrupulously they observe laws and requirements. North Carolina immigration lawyer Murali Bashyam recounts an episode in which a U.S. employee for an Indian I.T. firm he represents traveled to India to get married and applied for a new H-1B visa while he was there. After two months of delays and harassment by immigration officials, Mr. Bashyam says, the worker was ultimately denied the visa. “This employee has never violated his H-1B immigration status, and his employer carefully followed all relevant laws, but the employee is now stuck in India,” Mr. Bashyam writes. “This type of ‘gotcha’ immigration policy should never exist in this country.”

Mr. Palmer, whose lawsuit has been moved to federal court, alleged that Infosys wasn’t just duping immigration authorities, but also U.S. tax authorities; the company was paying workers for full-time work done in the U.S. without withholding federal or state income taxes, the complaint says. And the complaint also alleges Infosys was pulling a fast one on its clients by sending low-skilled workers on the B-1 visas but charging the same high labor fees as it normally would for a high-skilled worker on an H-1B.

Despite additional attempts to blow the whistle, Mr. Palmer got nowhere and became worried about “pressure, harassment and retaliation for refusing to be a part of the illegal conduct,” according to the complaint. He claimed the harassment included racial taunts and criticism for being Christian. In the suit, Mr. Palmer sought unspecified monetary damages for emotional distress, unpaid bonuses and expenses, and corporate negligence.

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